On February 15, 2012, Rep. Speier (D-California), and Sen. Carper (D-Delaware) introduced a bill that would rework how GI BIll benefits would be counted under the 90/10 rules within the for-profit sector.
The 90/10 rule was meant to limit for-profit schools from getting all of their income from the Federal government in the form of Title IV loans. The unfortunate outcome was that some schools signed on a lot of students who didn’t do well academically and dropped out. Since they took federal student loans they were not able to default on the loan and became saddled with debt and no degree.
The 90/10 rule was aimed at making sure the for-profit sector would raise academic standards and become less reliant on federal student loans. One of the ways to help that 90/10 ratio was to bring on more military students with GI Bill benefits.
With this new bill by Rep. Speier and Sen. Carper, the GI Bill Benefits would be lumped in with the Federal student loan amounts. This has some unfortunate side effects for the education industry and for the the schools themselves.
- The for-profit growth rates will be further cut due to a loss of a very strong audience. This will negatively affect the stock prices for the publicly traded schools long term.
- The veterans themselves may not be accepted to certain schools depending on their financial situation. This limits the veteran’s educational choices. Online education is a great path for military members since their curriculum can be delivered anywhere. The curriculum is also flexible for members who are on active duty or have to go for deployment. Veterans need these options.
- GI Bill benefits are earned through military service. They do not have to be paid back and are not considered to be “loans.” Lumping them into the loan category is misleading. Are they federal funds? Yes, but we gained valuable protection for our country from these individuals. We owe it to them to give them as many educational choices as possible.
If you oppose this bill, please write to your local representative or senator. If you want to contact Rep. Speier directly, you can call her at (202) 225-3531. You can contact Sen. Carper at 202-224-2441.